Snapshot: USD/CHF is holding near 0.7904, supported by the SNB’s easing bias. Schlegel’s recent comments about potentially returning to negative rates should disinflation overshoot is keeping pressure on the Franc. Focus shifts to the FOMC Meeting Minutes at 14:00 ET.
- Watch for any hawkish surprises in the FOMC minutes, which could trigger further USD strength and push USD/CHF higher.
- Geopolitical risks in the Middle East, as flagged by the Guardian, could trigger a flight to safety, providing some support for the Swiss Franc.
Bias into NY: We anticipate continued USD/CHF upside towards 0.7950, driven by the SNB’s dovish stance and moderately short CHF positioning. Rising US 10Y real yields also provide a headwind for the Franc.